The South African rand strengthened on Tuesday after the country’s two largest political parties, the African National Congress (ANC) and the Democratic Alliance (DA), both signalled their commitment to the coalition government and expressed willingness to resume talks over the bitter budget dispute. By 14h24 GMT, the rand was trading at 19.52 to the dollar, 0.70% stronger on the day, following a 2.70% decline on Monday. Despite weeks of negotiations, the ANC and DA failed to reach an agreement on the budget, leading to the DA’s vote against it in parliament and subsequent legal challenge. This stoked fears among investors, who were concerned that the pro-business DA might either leave the Government of National Unity or be pushed out by a faction within the ANC. However, the ANC reaffirmed its commitment to the multi-party government formed last year. The Johannesburg Stock Exchange’s Top-40 index (.JTOPI) was up about 2.30%, while the benchmark 2030 government bond saw its yield fall by 19.5 basis points to 9.18%, as reported by Reuters.

In the United States, major stock indices surged more than 2% on Tuesday, snapping a three-day losing streak marked by heightened volatility. Investor sentiment was buoyed by hopes of progress in U.S. tariff negotiations, with the S&P 500 gaining 3.50%, the Dow Jones soaring by 1 300 points (3.50%), and the Nasdaq rising 4%. The rebound followed comments from Treasury Secretary Scott Bessent, who revealed that approximately 70 countries, including Japan, had reached out to the White House to initiate tariff discussions. Despite the positive market sentiment, tensions between the U.S. and China remained elevated.

UK stocks also saw a strong recovery, gaining 2.70% to close at 7 910.5 on Tuesday, ending a four-day losing streak driven by escalating global tariff tensions. Since the tariff announcements, the index had fallen around 11%, wiping out roughly £235 billion in market value. Aerospace and defence stocks, including Rolls-Royce (+6.80%) and BAE Systems (+4.60%), were among the top performers, while companies like Experian, Hiscox, IAG, Games Workshop Group, and Polar Capital Technology all advanced by more than 5%.

European stocks rebounded sharply on Tuesday after their worst four-day slide since the pandemic, triggered by concerns over US tariffs. The Stoxx 50 rose 2%, and the STOXX 600 gained over 2.70%, heading for their best day since 2022. Gains were broad-based, led by financials, industrials, and defence stocks, although telecoms lagged. This recovery followed significant losses after President Trump’s 2 April tariff announcement, which had erased around $1.7 trillion from the region’s benchmark index.

In Asia, Japanese equities surged on Tuesday, with the Nikkei 225 rallying 6.03% to close at 33 012 and the broader Topix Index rising 6.26% to 2 432, as investors welcomed signs of easing trade tensions between Japan and the US. The rally followed news that US President Donald Trump had agreed to hold trade talks with Japanese officials following a phone call with Prime Minister Shigeru Ishiba.

In China, equities also rebounded, with the Shanghai Composite rising 1.58% to close at 3 146, and the Shenzhen Component gaining 0.64% to 9 425. This recovery came as Beijing intervened to stabilise capital markets amid escalating trade tensions with the United States.

In the commodities markets, WTI crude oil futures rose to around $61.10 per barrel, following a sharp three-session selloff that had driven prices to their lowest levels in nearly four years. Gold rebounded to $3 000 per ounce, recovering from a near four-week low, as concerns about an escalating trade war and the potential for a global recession fuelled demand for safe-haven assets.